ACCT 220 ACCT220 Quiz 1 Answers (UMUC)
- Generally Accepted Accounting Principles (GAAP) allow companies to issue financial statements, using either the cash basis or the accrual basis of accounting, depending on their needs.
- Adjusting entries are done to make sure that expenses and revenues are recorded in the proper accounting period.
- A compound journal entry can never affect more than two accounts.
- The current ratio is cash divided by current liabilities.
- Materiality is subjective. One company may consider $1,000 material and another company may not.
- Revenues are recorded when _______________.
- Which of the following is NOT a liability?
- Management failing to reveal a default on a loan agreement will have violated what principle?
- Expenses are recorded in the same period that related revenue is recorded, according to the _______________.
- Accumulated depreciation is _______________.
- An asset cost $14,400 and is expected to last 8 years, at which time it will be sold for a scrap value of $2,400. Using straight-line depreciation, the monthly depreciation journal entry would be _______________.
- When money is collected from a customer previously billed, we _______________.
- Which event will have the effect of increasing retained earnings?
- The income summary account is used to _______________.
- The dividends payable account belongs on which statement?
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